HOUSE BILL No. 5568 January 22, 2002, Introduced by Rep. Cassis and referred to the Committee on Tax Policy. A bill to amend 1974 PA 198, entitled "An act to provide for the establishment of plant rehabilitation districts and industrial development districts in local govern- mental units; to provide for the exemption from certain taxes; to levy and collect a specific tax upon the owners of certain facil- ities; to impose and provide for the disposition of an adminis- trative fee; to provide for the disposition of the tax; to pro- vide for the obtaining and transferring of an exemption certifi- cate and to prescribe the contents of those certificates; to pre- scribe the powers and duties of the state tax commission and cer- tain officers of local governmental units; and to provide penalties," by amending section 2 (MCL 207.552), as amended by 2000 PA 247. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 2. (1) "Commission" means the state tax commission 2 created by 1927 PA 360, MCL 209.101 to 209.107. 3 (2) "Facility" means either a replacement facility, a new 4 facility, or, if applicable by its usage, a speculative 5 building. 06282'01 * JLB 2 1 (3) "Replacement facility" means 1 of the following: 2 (a) In the case of a replacement or restoration that occurs 3 on the same or contiguous land as that which is replaced or 4 restored, industrial property that is or is to be acquired, con- 5 structed, altered, or installed for the purpose of replacement or 6 restoration of obsolete industrial property together with any 7 part of the old altered property that remains for use as indus- 8 trial property after the replacement, restoration, or 9 alteration. 10 (b) In the case of construction on vacant noncontiguous 11 land, property that is or will be used as industrial property 12 that is or is to be acquired, constructed, transferred, or 13 installed for the purpose of being substituted for obsolete 14 industrial property if the obsolete industrial property is situa- 15 ted in a plant rehabilitation district in the same city, village, 16 or township as the land on which the facility is or is to be con- 17 structed and includes the obsolete industrial property itself 18 until the time as the substituted facility is completed. 19 (4) "New facility" means new industrial property other than 20 a replacement facility to be built in a plant rehabilitation dis- 21 trict or industrial development district. 22 (5) "Local governmental unit" means a city, village, or 23 township. 24 (6) "Industrial property" means land improvements, build- 25 ings, structures, and other real property, and machinery, equip- 26 ment, furniture, and fixtures or any part or accessory whether 27 completed or in the process of construction comprising an 06282'01 * 3 1 integrated whole, the primary purpose and use of which is the 2 engaging in a high-technology activity, the manufacture of goods 3 or materials, or the processing of goods and materials by physi- 4 cal or chemical change; property acquired, constructed, altered, 5 or installed due to the passage of proposal A in 1976; the opera- 6 tion of a hydro-electric dam by a private company other than a 7 public utility; or agricultural processing facilities. 8 Industrial property includes facilities related to a manufactur- 9 ing operation under the same ownership, including, but not 10 limited to, office, engineering, research and development, ware- 11 housing, or parts distribution facilities. Industrial property 12 also includes research and development laboratories of companies 13 other than those companies that manufacture the products devel- 14 oped from their research activities and research development lab- 15 oratories of a manufacturing company that are unrelated to the 16 products of the company. For applications approved by the legis- 17 lative body of a local governmental unit between June 30, 1999 18 andJune 30, 2002DECEMBER 31, 2007, industrial property also 19 includes an electric generating plant that is not owned by a 20 local unit of government. Industrial property also includes con- 21 vention and trade centers over 250,000 square feet in size. 22 Industrial property may be owned or leased. However, in the case 23 of leased property, the lessee is liable for payment of ad 24 valorem property taxes and shall furnish proof of that 25 liability. Industrial property does not include any of the 26 following: 06282'01 * 4 1 (a) Land. 2 (b) Property of a public utility other than an electric 3 generating plant that is not owned by a local unit of government 4 and for which an application was approved by the legislative body 5 of a local governmental unit between June 30, 1999 andJune 30,62002DECEMBER 31, 2007. 7 (c) Inventory. 8 (7) "Obsolete industrial property" means industrial property 9 the condition of which is substantially less than an economically 10 efficient functional condition. 11 (8) "Economically efficient functional condition" means a 12 state or condition of property the desirability and usefulness of 13 which is not impaired due to changes in design, construction, 14 technology, or improved production processes, or from external 15 influencing factors which make the property less desirable and 16 valuable for continued use. 17 (9) "Research and development laboratories" means building 18 and structures, including the machinery, equipment, furniture, 19 and fixtures located in the building or structure, used or to be 20 used for research or experimental purposes that would be consid- 21 ered qualified research as that term is used in section 30 of the 22 internal revenue code, except that qualified research also 23 includes qualified research funded by grant, contract, or other- 24 wise by another person or governmental entity. 25 (10) "Manufacture of goods or materials" or "processing of 26 goods or materials" means any type of operation that would be 27 conducted by an entity included in the classifications provided 06282'01 * 5 1 by sector 31-33 -- manufacturing, of the North American industry 2 classification system -- United States, 1997, published by the 3 office of management and budget, regardless of whether the entity 4 conducting that operation is included in that manual. 5 (11) "High-technology activity" means that term as defined 6 in section 3 of the Michigan economic growth authority act, 1995 7 PA 24, MCL 207.803. 06282'01 * Final page. 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